Northrop’s Space Revenues Projected To Drop Amidst Overall Rise

Northrop Grumman’s recent investor guidance forecasts a dip below $3 billion for its Space Technology subsidiary, and possibly as low as $2.5 billion, after two years of strong growth. Space Technology, a unit that was created after Northrop Grumman acquired the space and defense assets of TRW Inc. in December 2002, reported revenue of $3.3 billion in 2004.

Space Technology will focus on expanding margins over the next several years while preparing for future competitions in the military satellite communications area, NASA’s crew exploration vehicle, space science missions and software defined radios. “This business comes in lumps because of the large dollars associated with the programs,” said Alexis Livanos, president of Northrop Grumman Space Technology. “We will take this opportunity to get ready for the next set of lumps that will come two or three years from now.” Meanwhile, Northrop Grumman Mission Systems (formerly TRW Systems, it includes the company’s Command, Control & Intelligence Systems and Missile Systems business areas), is expected to grow from its base of $4.95 billion in 2004.

Overall, Northrop Grumman still expects its revenue in 2005 to rise from $29.9 billion in 2004 to $31 billion or so in 2005, and to reach $33 billion in 2006 as a result of the U.S. Navy’s DD(X) program.